Hong Kong Housing Market Sees Worst Decline Since 2016

The world’s least affordable housing market may be headed for a “correction,” say some market analysts.

So far this 2018, sales of newly built residential construction in Hong Kong are on track to be the lowest since the very beginning of 2016, according to data from Midland Realty.

Existing home sales have fallen for the eighth consecutive week, the longest losing streak since 2016, according to the Centa-City Lending Index. And the week of November 22 experienced the biggest single-week decline of -1.3$ week/week EVER.

Couple all of this news with the facts that Hong Kong experienced its first interest rate hike this month in 12 years AND the escalating trade tensions with China and the United States.

Housing analysts in Hong Kong point to several “signs” that indicate a faltering market. Some of these signs may sound quite familiar to you.

Plummeting mortgage applications…

Mortgage applications in Hong Kong slid an eye-popping 56%, the largest month/month drop in mortgage applications in 20 years, according to Centaline Mortgage Brokers, Inc.

Sales of luxury homes plunge…

According to Ricacorp Properties, Ltd., the fewest number of luxury homes have sold since 2005.

According to Derek Chan, head of research for Ricacorp Properties, “A Lackluster stock market and the China- US trade war have led to a wait-and-see attitude for both investors and end users.”

The number of luxury home transactions in November is seen as the “worst on record.”

Agents are taking forced “holidays.”

Midland Realty, one of Hong Kong’s largest property agencies, has given notice to 100 of its “bottom performing” staff.

The bottom 10 performing staff members have been asked to leave the agency.

The next bottom 55 performers have been asked to take a leave without pay for a minimum of three months.

The remaining 35 bottom performing staff members have been told that their “performances are being closely monitored.”

Plethora of price cuts on listings…

Between 17% to 28% listings have experienced at least one price cut.

Tumbling new home sales…

According to Midland Realty, new home transactions in October 2018 came in at the lowest level in six months…a drop of -43% compared with September 2018.